Red Cat (RCAT) 10% Owner Jeffrey M. Thompson Sells Shares

What Happened

• Jeffrey M. Thompson, a reported 10% owner of Red Cat Holdings (RCAT), reported an open-market sale of 150,000 shares on September 15, 2026 at a weighted average price of $7.74 for proceeds of $1,161,000.
• On the same date he also settled a previously disclosed variable prepaid forward contract (dated Sept 15, 2025) and transferred all 750,000 pledged shares; the settlement occurred at the contract forward floor price of $9.14 (750,000 × $9.14 = $6,855,000).
• The filing also records Thompson’s earlier derivative arrangements: a Jan 14, 2026 variable prepaid forward covering up to 1,500,000 shares (still outstanding and may be settled in cash or stock, per the contract).

Key Details

• Transaction dates/prices: Open-market sale 150,000 shares on 2026-09-15 at $7.64–$7.89 (weighted avg $7.74); VPFC settlement 750,000 shares on 2026-09-15 at $9.14 (floor).
• Proceeds: $1,161,000 from the open-market sale; the transferred VPFC shares equate to ~$6.855M at the $9.14 settlement price. The original Sept 2025 VPFC had provided an up-front cash payment of $6,565,293.75.
• Shares owned after transaction: Not specified in this Form 4 filing.
• Notable filings/footnotes: Sale executed under a Rule 10b5-1 trading plan (adopted March 31, 2026). The Sept 2025 VPFC was held in a collateral account with the buyer holding a security interest; dividends and voting rights were subject to the contract terms. The Jan 2026 VPFC (up to 1,500,000 shares) remains in effect and allows an election to settle in cash. The open-market sale prices ranged $7.64–$7.89 (weighted avg reported).
• Filing timeliness: Form filed 2026-09-17 for transactions on 2026-09-15 (appears filed within the typical two-business-day window).

Context

• Variable prepaid forward contracts (VPFCs) are financing arrangements where the insider receives upfront cash in exchange for pledging shares to be delivered (or settled in cash) at a future date; settlement quantity depends on future stock price relative to contract floor/cap. The Sept 2025 VPFC was settled at its floor price, resulting in transfer of the pledged shares.
• The open-market sale was executed under a pre-established 10b5-1 plan, which typically indicates scheduled, formulaic trades rather than ad-hoc insider timing. As a 10% owner, these moves reflect large-holder financing and planned trading, not necessarily executive compensation activity.